|
Will
You Ever Be Able to Retire?
The
federal government and employers are shifting the duty of
retirement funding from themselves to workers. How will this
affect your future?
 Back
in the Day...
Twenty-somethings often refer to their parents’ youthful
years as “back in the day”—and little do they
realize how much things have changed since then—economically,
socially, and politically. These changes impact every American,
but they are especially relevant to those beginning to think
about target retirement dates and whether they have saved enough.
“Back
in the day” people worked long enough at one job that they
drew adequate pensions in retirement. The luckiest (or most
visionary) ones are the “triple dippers” who collect
a civil service or military pension, a pension from years of
working for a private company, and social security.
While triple-dipping
is an enviable way to fund retirement, at least one dip of the
trio is quickly disappearing: the company pension. Only about
40% of the baby boom generation, just now beginning to retire,
will have any sort of pension, and the life-long health insurance
benefits that were once part of nearly every retirement package
are for the most part a thing of the past.
When the
government introduced IRA accounts in 1975, they seemed like
a great way for people to amass tax-deferred savings, but they
are strictly the responsibility of the individual. You have
to have the money, and you have to hope you’ve found a
good place to invest it.
Six years
later, 401K plans came along. With participating employers contributing
some matching funds, employees who participate defer taxes on
part of their income and get a literal pay raise from the funds
match. Once again, it sounds like a great idea: So why are economists
worried that America is facing a retirement crisis?
To begin
with, only a little over half of employees who are offered a
401K plan actually participate. Some cash out their plans when
they leave, often because they need the money for living expenses
while they look for another job, or they want to pay ahead on
debts they know they can’t handle if they aren’t working.
While some
of the non-participants have IRA accounts or other individual
savings plans, an alarming 31% of workers 40 or older admit
that they have not saved anything at all for retirement, according
to a recent AARP Bulletin poll. The same poll revealed
that 28% of those who had already retired had
saved nothing! Like almost 60 percent of current retirees, Social
Security is their major source of income.
“But I still have my pension...right?”
 Wrong.
Many companies have converted pension funds into 401Ks, expecting
employees who know little about the stock market to figure out
how to invest for their futures. Some companies simply fund
401Ks with 100% company stock. Where does that leave the employee
if the company goes bankrupt—as Enron did, leaving thousands
of employees out of work and with shares of company stock once
valued at $80 worth less than a dollar?
Where Do You Stand?
If you
participate in an IRA or 401K, by all means keep doing so. Don’t
take out any “loans” on them. And remember that according
to the fed’s own web site, you should expect Social Security
to replace only about 40% of the income you will need in retirement.
The average couple on social security receives about $20,000
annually from the government. According to Bloomberg’s
retirement calculator, this couple needs an investment portfolio
of an estimated $500,000 to make up the other 60% they need
($30,000) to bring them up to a retirement income of $50,000
a year.
Maybe this
doesn’t worry you. Perhaps you are right on target. Congratulations!
You’re in the fortunate minority.
But--
more than half of all workers who are over 55 have saved less
than $50,000. That amount is almost insignificant. It will
generate only about $3000 a year—and that’s assuming
a 6% return and no unexpected nose-dives in the economy.
How did
people get into this fix? There are plenty of reasons. For one
thing, real wages have remained stagnant since the mid-1970s,
meaning that despite very hard work, many have needed every
penny just to get by. Poor spending habits—the desire to
have it all and have it now—have led others down the road
to debilitating debt. 401Ks and IRAs are accessible (although
you pay taxes and a penalty). People borrow to pay for college
and medical expenses, and somehow the money never gets paid
back to the retirement fund.
Is
retirement security a luxury you can’t afford?
With an
uncertain economy, skyrocketing healthcare and energy costs,
and little help from employers, retirement may seem like an
impossibility to you.
It
doesn’t have to be that way.
We are
living longer and longer. Must we spend our retirement years
filled with anxiety about outliving our money? Will we just
have to keep working forever?
It
doesn’t have to be that way.
Even if
you are approaching retirement age with little in the way of
savings, there is still time to make up for the shortfall, relax,
and enjoy the rest of your life.
It’s
all in your hands. But you must be willing to take control of
your finances and turn your life around.
 As
we said at the beginning of this article, the responsibility
for retirement income is yours now. The government will help
you out a little bit, but you need to find a way to earn about
60% of what you will need.
There
IS a way.
Even if
you must stay home to take care of an ailing spouse or aged
parent, there IS a way. There is a business you
can run from your home, your RV, your vacation cottage, even
a lounge chair on a sunny beach. Technological advances in the
past few decades have made it all possible, and it’s working
incredibly well for thousands of people. To establish a viable
business that will produce income now and for years to come,
all you need is an Internet connection and a telephone.
Skilled professionals who took back their lives will be happy
to teach you the simple secrets of their success.
Why haven’t
you heard about this before? If you had, you’d be ahead
of the game. But the important thing is that you know about
it now, and the sooner you act, the sooner you can begin
to free yourself from anxiety about how to finance your retirement.
In fact, you can look forward to enjoying the rest of your life
as you live out your best years in the security of ever-increasing
wealth.
Take the first step now. Fill
out the form below for free, no-obligation information.
Heidi
B. Dietrich
617-905-3946
Email
|||||||||||A
Supportive Environment
|||||Owning
a Franchise||||A
Bonus for Airline Employees
|
